The Asia InsurTech Podcast had a great conversation with Sanchit Malik, the co-Founder and CEO of Pazcare. We discussed approaching the Insurance and InsurTech markets from a B2B perspective and how Sanchit and the Pazcare team look at solving problems and creating efficiencies using technology.
Please see the transcript of the conversation below.
Michael Waitze 0:04
Let’s give this our best shot. Hi, this is Michael Waitze. And welcome back to the Asia InsurTech podcast. This is the only podcast in Asia focused on insurance that gives entrepreneurs, thought leaders and investors a platform to discuss how technology is reshaping the insurance industry in Asia. And frankly, globally. We are happy to have Sanchit Malik, a co founder and the CEO at Pazcare on the show today. Thank you so much for joining us. How are you doing, by the way?
Sanchit Malik 0:36
Thank you so much, Michael, for calling me for the podcast and doing well. Hope you’re doing well as well.
Michael Waitze 0:41
I am super duper. Before we jump into the main part of this conversation, what do you think is the biggest trend in InsurTech in India?
Sanchit Malik 0:53
Yes. So if you see that last 10 years of insurance in India, right. So primarily, they have there’s a lot of innovation that has happened in the consumer side of the products, right. So you had companies like Policybazaar, Coverfox, Turtlemint and similar kind of companies who have done a really good job in terms of doing b2c penetration of insurance products that insurance products. So, I mean, some guys built a platform where you can buy some built network of agents, through platform where they can distribute more products. So I think now, there is a lot of innovation that is happening on the distribution of the corporate insurances products with the b2b products, right. So that’s where a lot of innovation is happening. And also, more importantly, there’s a lot of innovation that is happening in the health insurance as a product as well, especially after pandemic, that products value has increased drastically in terms of when it comes to people realizing the value of the product. So there’s a lot of innovation that is happening on the distribution side of corporate products as well right now that this is a very exciting time to be in that space.
Michael Waitze 2:21
I understand. Before we dig a little bit deeper into that, and you saw me taking notes. So I’ve got a few things that I want to go deeper for. But can we get a little bit of your background as well, just for some context?
Sanchit Malik 2:33
Yeah, so I’m a tech entrepreneur. Before this, I was running this company called town script. Our script is a DIY events platform, which helps event creators in setting up their events instantly and start selling tickets online. Quickly, so we used to serve more than 5 million tickets annually. And the company is now a fully owned subsidiary of this large company called took my show, which is India’s large, largest platform for entertainment and movies and events. So they have now bought over the business. So this is my second company. I thought that when I was planning to start a new business, so I’m a newbie in the insurance space, it’s been only one and a half years. But I believe as a tech entrepreneur, that that’s my strength. I want to bring a lot of innovation in this industry, through tech. That’s how I got into this space.
Michael Waitze 3:33
So this is really great. Tell me what it looks like to you. As a newbie in the insurance industry. Looking from the perspective of somebody who’s built a successful sold now subsidiary company, to a larger company, you’re sitting there thinking, Okay, I want to do something else. I can’t do nothing, right. This is the this is the curse, I guess of the entrepreneurs, everything looks like an opportunity. Yeah, I have this conversation all the time, and I love it. But you’re looking around going okay, I did tickets and events has nothing to do with insurance. What was it about the insurance industry a couple years ago when you started where you said, I have to do this because it’s just too big. Do you know what I mean?
Sanchit Malik 4:15
Yeah. So see, I think after my company was bought over by book my show, I had like three years of time where I was exploring what to do next in my life, right. Yeah. So and that was when actually I was very, very integrated with financial services in the space. So one, one regret which I had from my previous company was that events in India is not a very large market. So Financial Services is one space which everyone, everyone needs financial service, right. So if I want to buy mutual funds, or I want to take a loan or then I need to buy insurance So there was a lot of innovation happening in India, in wealth creating products and lending, right. And that’s where actually, I used my insurance for the first time as a first time car buyer. And then I realized the value of this product as a wealth protecting product, right? So and that’s, that’s how actually, I sort of got into this space and started looking at the space from b2b perspective. So my strength lies as an individual lies in b2b and also as a tech entrepreneur. How can I bring tech in a particular industry? So that’s the that’s the advantages, right, which I bring in here.
Michael Waitze 5:40
So this idea of you buying your first car, and understanding the value of protection and coverage is important, right? Because it changed the way you viewed not just financial services as a thing, but insurance itself, as part of as a subset really of financial services. So if that’s the case, right? How do you personally from a b2b perspective, how then do you go about making insurance relevant, because that’s what it was to you? Right? Before it was kind of this thing that was out there? Now you have a car, you’re like, oh, no, something happens to my car. Oh, wait, I can get insurance for that. Do you know what I mean? So how do you work to make it relevant for past care, so that people can understand the experience that you had when you said, Okay, I need this now? You know what I mean?
Sanchit Malik 6:28
Yeah. So so when I mean, then it was about the, like, you start feeling that this is this product is very valuable, right? So once you use it, right, so you don’t realize the value of insurance till the time you actually end up using it, right? This is that kind of a product, right. And it’s not a very high frequency usage product. So you don’t use it, like almost on a daily basis or a monthly basis. Right. So it’s like a once in a blue moon is when you will, you will actually realize the value of the product. So one reason was that in second was actually there is a there has been a lot of lack of trust, if I go to one generation before, right. So India, if you see as an economy has exploded in last 1520 years, right, so and insurance is a new product for our, for our economy, right for our country, right? So if you compare it with somebody like Europe, or or us, or, in fact, Singapore, right, so there, it’s a it’s a mandate, right? Everyone has insurance, right? So 95% of the people in the US having health insurance life insurance for themselves? It’s a it’s, it’s compulsory, right? In India, it’s not right. So and also there is there has been, there has been more or less like a thought process that you don’t get claim, if you get if you get, I mean, there is a lack of trust, when it comes to this product itself, right. And actually, when I used it, and there was a new age, Inshallah, which I used, and actually, the claim process was very smooth. And that made me realize that this, this thing has to come in the b2b side. Also, when you talk to a lot of b2b employers, right, and you talk to a lot of companies, the experience has been broken, broken, because of lack of trust, which is actually due to lack of technology in the space. It’s not the there has been a wrong intent or anything. It’s been because of the lack of information, awareness of the product, and also lack of tech in the whole space. So that actually made me very much realized that I think this is the space to be in. And that’s the problem that I should be solving.
Michael Waitze 8:46
Got it. And why go. And again, I’m just going back to the tickets business, and I’m not an expert on this, right. But the ticket business seems to me to be uniquely b2c, I have a big event. I want a bunch of people to come and buy my tickets. It’s not so much b2b, right? Like you’re not selling to one big company, and then they bring 150 People with them. What makes you want to go to the b2b side of the business, and I guess the follow on to that before you even answer is why did most insurtechs Go b2c? First, right. Like you mentioned policybazaar Cover Fox companies that everybody knows what right, b2c? What made you go b2b?
Sanchit Malik 9:24
Yeah, so, so if you see my business in deep balls, right, so we used to work with the likes of Comic Cons conferences. So those people like the kind of clients we used to work with, we had to sell our platform to them. It was primarily Yes, there are ticket buyers who are built to see but actually you have to convince the b2b to actually use your platform to sell their tickets, right. So it was like an event management platform and event registration platform, right. So so it was a b2b driven marketplace. Right. So, so primarily, it was b2b and then build a lot of relationship in India because of that, right. So built a good network of myself. Now, that was actually the main reason that I realized that I think this is very similar. Now, when it comes to the the likes of consumer businesses that have been there in India, red who have done pretty well. So it’s like, as an entrepreneur, you have to be opportunistic, you figure out right, where there is a gap. I mean, there is no point in becoming another policy wizard, because other than cover Fox, because they have already solved the problem, right? So mostly, yeah, mostly, there’s a lot to be done. There’s a lot to be done, of course, but I mean, there is a brand, there are a couple of brands who have done pretty well. And I believe that there is a lot to be done on the agent penetration side, also, like there are millions of agents in India. So that’s a huge space in itself. And it’s not a place where only two companies will solve the problem when it comes to the likes of and they have tracked only motor insurance, for example, if you talk about a couple of companies that are there in b2b to see. So they have already cracked motor insurance sales, but nobody has been able to crack health insurance and life insurance at scale norm people are trying to crack when it comes to retail products. Why agents? Right? So I think there is a lot and a couple of companies have come in in that space, also in retail side as well, where you’re trying to sell health insurance via agents. I mean, huge, huge problem to solve that friend. Also, I think every problem requires a founder market fit, I felt that I’ve done a lot of b2b, I think there’s a gap, of course, founder market fit. And there should be a gap also, I mean, if there was any platform, at that point of time, I wouldn’t have started, I would have would have been trying something new, something different. So I felt like when I started at that time, there were not any company was doing something at scale, I found out that there is a gap. And it’s a large market. And I feel I have the strength of executing in that in that space. So I thought, hey, why don’t I start, I want to
Michael Waitze 12:08
talk explicitly about this founder market fit. It’s not that hard as an entrepreneur, once you’re in kind of the game, right? You can see these market gaps, I think pretty clearly. But at some point, you have to ask yourself, even if this is a gigantic opportunity, am I the right founder? Is this the right team to actually go out and solve this problem? Are we the best people to do this? In other words, should we even give this idea away to another team that’s probably better at this, and focus on another opportunity. But I like this idea that again, and I love the fact that you corrected me the ticket business to me looks like a big b2c business. But in fact, it’s not. Because you’ve got to convince the operators of these events to deal with you, and create that two sided market. So I love that. And I think this idea of founder market fit is really important. I want to ask you this, too. You said earlier that the trust didn’t, it wasn’t there, but not because the insurance companies were doing something wrong, but because the tech wasn’t there to allow them to create it. Can you talk about how the technology and even specifically the stuff that you’re creating? helps create that feeling of trust?
Sanchit Malik 13:19
Yeah, so basically, if you see, I mean, it’s why do claims don’t get processed? Right. So when I, when I see the, when I see it in detail, right? So many of the times, the consumer, the individual, himself or herself is not even aware of what’s covered and what’s not covered. It’s as simple as that. I mean, I don’t I’m not doing any anything, which is very fancy here, right. So, so, what happens for example, in case of Employee Insurance, right, so, you get emails from your HR or finance team right here, this is the cover that you have got and which nobody looks into right nobody they get so many PDFs, which they tend to not look into and the terms are explained in a very like very complex manner or like very insurance not very user in a very user friendly way right. So, so, I think what needs to be done here is that simple tech, which gives you in a very layman language, which is very user friendly to any individual like this is covered and this is not covered. In fact, even if this expectation is said with an individual or with with an employer, then most of the times the claims are rejected because the individual is filing for the wrong claim actually, he or she is not covered, right. So I think tech can play a very important role in making sure that these basic elements of right set of information being accessible at with With a very user friendly manner, right? So these are very small. This is one very small example, which I’m telling you, yeah.
Michael Waitze 15:05
How important is it for a company like pas care to focus on, at some level? You can call it financial literacy. You can call it insurance literacy. But at some level, like you said, product knowledge is important. Is there a part of your business or business time that’s dedicated to saying, we have all these products, that’s great, we can penetrate the market, because we know who the SMEs and the small businesses are that need our stuff. But at the end of the day, if if the people that are buying the product, don’t know what it is, then it doesn’t matter, because they’re never going to buy it, right. Like if I show you a spaceship, you’re just gonna be like, I don’t need this thing, because I don’t know what it does. How much time do you spend on this financial literacy aspect of this?
Sanchit Malik 15:46
I think my, my, the most important part of this business is to literally bring literacy in this to our users, right? So it’s a new, it’s a new product, actually, I mean, to be honest, if I was not in insurance industry, I was like, Hey, this is something before I actually ended up using my car insurance by myself, right? So I’d never valued it. Right. So I, I now I realized the value of this product so big, it’s mainly because it’s not part of our culture. It hasn’t been part of our culture till today, right. So and to be honest, our economy was also I mean, first, what you do in your life is first you create wealth, then you go for a wealth protection product, right? So we, we will we actually were not educated so much about this product, we haven’t been educated about this product. So I think the most important job in our case is actually to create a lot of literature on we create a lot of reports, we create a lot of blogs, a lot of content. And once you once an employee is on boarded on a platform to lot of rounds of emails, which are automated to educate them. So there is a lot a lot of bandwidth that goes in educating the users.
Michael Waitze 17:01
If you look at you mentioned this earlier, right, so the product penetration for insurance at scale in the West versus what it is in India, and frankly, in Southeast Asia as well, it’s just very different, right, particularly as a percentage of GDP per capita. But that GDP per capita is also has another influence on this, right? Like you said, step one is create some wealth. And inside the big cities, and this is true in every country, right? The wealth creation is faster. But as you move out to second tier, third tier cities, and then the suburbs of those third tier cities, is this a knowledge only problem? Or is it a GDP per capita issue as well, that needs to get solved before these products become more relevant for the employees and employers outside of the main cities?
Sanchit Malik 17:47
I think it’s a mix of both. So I mean, GDP per capita is a very important factor here. Right? So I mean, once you start making money, you start thinking about what to do with it. Right. So. So now as people are, I mean, if you talk about a city like Bangalore, it’s growing like crazy right now here. I mean, the per capita is crazy if you go to HSR Koramangala. Right. So but if you if you go to some like second tier, third year, city, I mean, that there is a there has been a growth rate for sure. I mean, I could personally sense it, right. So the economy is doing very fast in India, which is very good for us. And we are seeing that actually, when you ask me, it’s not because of one parameter. It’s because of both the parameters. That knowledge is not there, for sure. But the per capita is also playing an important role in the product.
Michael Waitze 18:46
How do you look at this idea? And again, you mentioned this for the ticket business, I think you explicitly called it like, we built this platform and this two sided marketplace. If you look at the difference between building a platform business and building a product business, where do you think the bigger engine of growth is? And then how do you look at it in the context of Pazcare?
Sanchit Malik 19:09
See in any two sided marketplace, so I see Pazcare also is a marketplace. Because I am a distributor, right? So I work with all the insurance. Right? So, so the, of course, like they’re the suppliers, which are the event creators, we’re, we’re like, quite many comparing here you have like 50, right? So it’s more like this marketplace is more driven by the demand, then then the supply, right? So it’s, I mean, there is the dynamics of the marketplace are different if I compare with towns, but definitely once you aggregate more demand, you’re able to work with the supply side and create better products for the demand. Demand side people right so I think that’s how I’m actually I can bring some analogy with my previous business here where, where I see this? Actually, I’m a two sided marketplace here as well.
Michael Waitze 20:10
Yeah, I think so. How do you look at this intersection of data? And the intelligence that the data actually provides you into product innovation? If you know what I mean, right. In other words, I’m always curious if technology drives the development of this innovative products, or if the idea around the products then drives the innovation on the technology side.
Sanchit Malik 20:32
I think you’re, that’s the second point, right? So data is the technology helps in collating data in a very smart manner. And then you can actually build algos around over and above that and actually create better products which are which are not there right now. Right? So, I mean, a lot of data has been lying in the Excel sheets of lot of people, right? So so what we are trying to do here is that, can we centralize the data? And actually, that’s what actually I mean, we have hired a VP of insurance products, right? Even though we sound like a marketplace to a lot of people be people, a lot of people compare us with a broker, right? But actually, we are not, we’re not, we’re not, we’re a tech company. We are an insurance tech company. So we are working along with the insurers to create better products. And the benefit of me, my model is that I can work with all the customers, right. So as an insurer, you can’t work with all the customers, you have your own sweetspot, because you are more concerned about the risk, right? So what we can do here is that we can bring them a lot more data than they could have by themselves, because we are a distribution play. And based on that we can create better products, with insurers by building a strong underwriting arm as well by ourselves. So that’s what we are doing right now. So we have hired a VP of insurance products from an insurance industry to build products around that.
Michael Waitze 22:04
So you’re gonna build your own insurance products? Or does that mean you’re going to become a full stack company as well? In other words, do you see a time where you’ll actually have a balance sheet, and you’ll be able to run your own underwriting as well.
Sanchit Malik 22:16
So our idea is that we want to be a distributor distribution player. However, we can work with insurers and help them create better products instead of doing it ourselves. Right. So that’s the whole thought process.
Michael Waitze 22:30
Got it? The more you work with some of these big, incompetent surance companies, do you see them having a mindset change as well? Do you know what I mean? As as it pertains to innovation, the use of technology and maybe using a company like past care to say we’ve always wanted to innovate, move a little bit faster, but now we have an incentive to do it because of companies like past care. And it becomes easier for you then to work with them over time.
Sanchit Malik 22:56
Yeah, so see, I mean, one and a half years back, they saw us as one of the channels, now they see us as a way of they really want to be with working with us. So the insurance companies and actually, I’m very, very happy, even though some of the companies do not have a very strong tech in play plays, but they want to improve. I mean, they want to do it in a better way. They want to work with us. And they’re actually very, very receptive to what we want to do. And they want to be trying out, creating more products along with us. That that actually surprises me, not surprisingly, but I also makes me happy that now actually, many of those insurance companies have a win for startups, right? Where they don’t want to lose out on the bus, right? So because one of us or a few of us will end up creating a lot of value in the long term. So they want to be part of the journey.
Michael Waitze 23:57
How do you make sure what’s the right way to ask this? So a year and a half ago, you were not involved in the insurance business at all, the only experience you had was buying your own car insurance. But as you get deeper and deeper involvements, like, are there things that do surprise you? You kind of triggered this thought in my brain of like, I can’t understand why this thing happens this way, or wait a second, this is also an opportunity that I didn’t expect to be here, you know, what I mean? Are the things that surprise you, because you come to it with like a blank slate in a way right.
Sanchit Malik 24:29
Yeah, so So I think it has its own pros and cons. Right? So sure. The The pros are that I just see I’m building a tech company, right? So the pros here are that basically, whatever problem I’m trying to solve, I I just think how can I bring tech here right so I just don’t want to do it for the sake of selling insurance. So when it like I my thought process that the how my wife Israel, I come with the mindset of bringing only tech, wherever I go and execute, I don’t want to do only insurance. So that because my pro con is that of course, sometimes I’m not as aware as my somebody who’s in the insurance industry for a very long period of time. So that will be my my limitation. But what I have done is I built a very, very strong team around my me right? People from Lombard ISIS Alomar people from Marsh people from very seasoned insurance broking companies in India. So I have a good mix of in even if you see my product manager, right, my tech product manager also comes from one guy is from insurance industry. One is from like a tech industry. Right. So, so that way actually solves that problem. And for me, yeah.
Michael Waitze 25:54
Are there times where, again, just you’re building a tech company, right? So not specifically, I mean, building specifically for insurance, but you understand what I mean, right? You’re building a tech company? Do you look at other industries like E commerce or travel, to try to understand how their platforms got built, as well to then maybe take some of the things that they’ve done Shopify as an example of this, and import them into the platform that you’re building as well?
Sanchit Malik 26:21
Yeah, definitely. So I mean, my co founder and CTO, he was director of engineering in this company called Clear tax, which is a tax filing platform. And before that, he before that he was with mine tickle, which is a SaaS, sales enablement platform, it’s a unique, it’s recently became a unicorn. So I mean, both the founders, right, completely from tech background. So that actually, our mindset is actually I mean, all of our developers and product managers majorly are from come from tech background. Yeah. So that actually helps us in bringing all of those thought processes of E commerce or Shopify, as you mentioned, in what in what we are doing.
Michael Waitze 27:07
So the longer your business is around, and the more incumbents you deal with, the more data you will gather, and you’ll be able to gather, and the more analysis you’ll be able to do, and the more you’ll be able to understand the markets at scale, but also granularly. Ryan, do you see a time even in the b2b side of the business, we go down one step further, and start dealing with personalized products, even for people that are in sort of the subset of the business to business part of the health insurance business that you’re dealing with?
Sanchit Malik 27:39
Exactly. So that’s what that’s what actually tech does, right? So it helps you bring personalization, right, so why haven’t we been able to create products? So I mean, which are personalized, right, for me as an individual, because I, as an insurance company, what the only way for me to get my data has been either through forms or through Excel sheets, right? So and the only way only parameter which I get is date of birth, right? So what’s my date of birth, right are some forms that they asked me to fill in, right? So so as a tech platform, right, so you can do a lot more integration or like a close interaction with the user where you can get their personal the more data than only date of birth, which helps you in personalizing and creating better products in the longer term. So that’s what I think that’s going to happen. I think in next 10 years, that has happened in many mature economies, of course, but a lot can lot will be happening in the in the Indian industry as well, I feel first we will solve the distribution problem. Because I think distribution itself is a very large problem in India, because the penetration is very low. And like with that a lot of innovation is going to happen in the the insurance product as well.
Michael Waitze 29:07
I want to ask a little bit more about engagement, and then I’ll let you go. One of the people that I’m one of the other people that I’ve spoken to in the FinTech space, in the financial services areas said, you know, banks are basically interacting with our clients on a day to day basis, right? Because whether you’re depositing money in the bank, getting paid buying something using your credit card, you’re just constantly interacting with your bank. Are there other ways you think using technology, that insurance companies insure tech companies can use the platforms that they have to interact with their clients in a meaningful way, right, like So some companies are out there saying like, buy insurance, get a movie ticket. That’s neat, but it’s not sort of day to day engagement. Are there other ways that this can happen besides the blog of course.
Sanchit Malik 29:52
Yeah, so. So I mean, it’s a very like for example, in case like lemonade is a great exercise Alright, so what they did was they take your car, the way you drive the car, and then that the design, that’s what your question is like, How can I just say? Yeah, yeah. Yeah. So yeah, I think I mean, like, for example, if you are enhanced health, right lot many people are trying to do like, how can we infer health product? Like if you have some kind of a behavior of on the health, right on your personal health? Right. How can we reward you? Or how can we reduce? Yeah, of course. Yeah. Yeah. So how can we like you have a smartwatch, we integrate with that. Right. So how can we actually create better products for you? Right, so and also give you a reward or maybe reduce your premium? Right, so yeah, something on that. So I think that’s that is going to happen. And that is happening, right? So a lot, a lot has already happened in the car insurance, for example, right in the US, where if your driving behavior is better, or once you switch on, then only you get your premium that you’re supposed to pay. So I think there has been a lot of I think, tech products will bring efficiency. That’s that’s that’s what I believe. Right? So which, manually we were not able to bring, I think the whole idea is to bring efficiency in the whole ecosystem through technology.
Michael Waitze 31:26
Got it. Okay, I will let you go. That was awesome. Sanchit Malik, a co founder and CEO of Pazcare. Thank you so much for doing this today.
Sanchit Malik 31:35
Thank you so much, Michael. It was really nice talking to you.